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Stock Market Outlook for December 29, 2020


While the notorious Santa Claus rally is showing difficulties gaining traction amidst a cloud of uncertainty pertaining to the coronavirus, sector performance is already indicative of this upbeat timeframe.

 

Real Time Economic Calendar provided by Investing.com.

 

 

*** Stocks highlighted are for information purposes only and should not be considered as advice to purchase or to sell mentioned securities.   As always, the use of technical and fundamental analysis is encouraged in order to fine tune entry and exit points to average seasonal trends.

Stocks Entering Period of Seasonal Strength Today:

Subscribers – Click on the relevant link to view the full profile. Not a subscriber? Signup here.

Invesco DWA Energy Momentum ETF (NASD:PXI) Seasonal Chart

Invesco S&P 500 Equal Weight Energy ETF (NYSE:RYE) Seasonal Chart

Caldwell Partners International Inc. (TSE:CWL.TO) Seasonal Chart

Analog Devices, Inc. (NASD:ADI) Seasonal Chart

Pitney Bowes, Inc. (NYSE:PBI) Seasonal Chart

Big Lots, Inc. (NYSE:BIG) Seasonal Chart

Whitecap Resources Inc. (TSE:WCP.TO) Seasonal Chart

Tractor Supply Co. (NASD:TSCO) Seasonal Chart

Consolidated Water Co. Ltd. (NASD:CWCO) Seasonal Chart

Neptune Technologies & Bioressources Inc. (TSE:NEPT.TO) Seasonal Chart

Marriott Vacations Worldwide Corp. (NYSE:VAC) Seasonal Chart

Global X China Materials ETF (NYSE:CHIM) Seasonal Chart

MFS Investment Grade Municipal Fund (NYSE:CXH) Seasonal Chart

WisdomTree Emerging Markets High Dividend Fund (NYSE:DEM) Seasonal Chart

Invesco S&P Emerging Markets Low Volatility ETF (AMEX:EELV) Seasonal Chart

iShares MSCI Emerging Markets Small-Cap ETF (AMEX:EEMS) Seasonal Chart

iShares Russell 3000 ETF (NYSE:IWV) Seasonal Chart

Patterson Dental Co. (NASD:PDCO) Seasonal Chart

Macy’s Inc. (NYSE:M) Seasonal Chart

BMO Equal Weight REITs Index ETF (TSE:ZRE.TO) Seasonal Chart

Rayonier, Inc. (NYSE:RYN) Seasonal Chart

Ballard Power Systems, Inc. (NASD:BLDP) Seasonal Chart

BHP Billiton plc (NYSE:BBL) Seasonal Chart

GoldMining, Inc (TSE:GOLD.TO) Seasonal Chart

First Trust ISE ChIndia Index Fund (NYSE:FNI) Seasonal Chart

Invesco CurrencyShares Australian Dollar Trust (NYSE:FXA) Seasonal Chart

iShares MSCI Europe Small-Cap ETF (NASD:IEUS) Seasonal Chart

iShares U.S. Oil Equipment & Services ETF (NYSE:IEZ) Seasonal Chart

iShares Global Consumer Discretionary ETF (NYSE:RXI) Seasonal Chart

Vanguard FTSE Pacific ETF (NYSE:VPL) Seasonal Chart

 

Editors note: With the holiday market closures over the next few days, our next report will be released on Tuesday, December 29th.  Stay tuned for the release of our monthly report for January, which will be released sometime in the next week.  Happy Holidays! 

 

The Markets

Equity markets charted another mixed session on Wednesday as the notorious Santa Claus Rally that is typical of the weeks surrounding Christmas shows difficulty gaining traction amidst concerns over the spread of the coronavirus.  The S&P 500 Index gained just less than a tenth of one percent, continuing to cling to short-term support at its rising 20-day moving average.  Intermediate-term risks remain to the rising 50-day moving average, now at 3558.  As of present, there is nothing to suggest reason to avoid this notoriously positive time of year for stocks that typically stretches into the first few days of the new year, but we must be cognizant of the deteriorating economic fundamentals that have become apparent in recent days.  Above average strength in economic data, particularly with respect to the consumer, has been a significant factor driving equity market performance since the spring, therefore, should these trends shift, the market will have lost its fuel to move sustainably higher.  Subscribers are being kept up to date of what to expect going into the new year and the risks that could impact markets.  If not already a member, subscribe now to be kept up-to-date of how to position and the opportunities that are present now and into the start of next year.

Today, in our Market Outlook to subscribers, we discuss the following:

  • The state of the energy market and what stance is warranted given the fundamental backdrop
  • The price of Oil
  • Weekly Jobless Claims
  • US Durable Goods Orders and the opportunity within
  • New Home Sales in the US and what it says about home buying activity
  • Investor sentiment

Subscribe now and we’ll send this outlook to you.

On the economic front, a report on durable goods orders in the US was released before Wednesday’s opening bell.  The headline print of November’s report indicated that new orders in the US increased by 0.9% last month, which was stronger than the consensus analyst estimate that called for an increase of 0.6%.  Core capital goods orders, meanwhile, rose by 0.4%, which was weaker than the 0.6% analyst forecast.  Stripping out the seasonal adjustments, the value of manufacturers’ new orders for durable goods industries actually declined by 5.2% in November, which is marginally weaker than the 4.8% decline that is average for this time of year.  Year-to-date, durable goods orders are trending 1.3% above the seasonal norm through this second to last month of the year.  While this may not seem like much, this is amongst the best performances in the past decade.  We sent out further insight to subscribers intraday.  Subscribe now.

And finally on Wednesday, Statscan weighed in with the progress of the economy in Canada, as gauged via Gross Domestic Product (GDP) through the month of October.  We’ve uploaded the seasonal charts to the database to view at your leisure.  Subscribers can login to view the charts at https://charts.equityclock.com/canada-monthly-gross-domestic...

Sentiment on Wednesday, as gauged by the put-call ratio, ended bullish at 0.78.  The result follows Tuesday’s print of 0.60, matching a multi-year low.  The suggestion of complacency is fairly evident, increasing the market vulnerability to a shock event.  The dark index, our gauge of institutional sentiment, meanwhile, declined slightly on Wednesday from 46.5% to 45.1%.  Levels above 45% are typically indicative of dark pool buying activity.

 

 

Seasonal charts of companies reporting earnings today:

 

 

S&P 500 Index

 

 

TSE Composite

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